Officials from the Bangladesh central bank are visiting Manila this week to pressure the authorities in the Philippines to find ways to return the $63mn that is still missing out of the funds stolen from its account at the Federal Reserve Bank of New York earlier this year, two people close to Bangladesh Bank (BB) said.
Unknown cyber criminals tried to steal nearly $1bn from the Bangladesh Bank account between February 4 and February 5, and succeeded in transferring $81mn to four accounts at Rizal Commercial Banking Corp (RCBC) in Manila. Only about $18mn has been recovered.
The Bangladeshi officials are alleging that the money was allowed to disappear into the casino industry in the Philippines, where investigators say it was laundered, because of systemic failures at RCBC, the two sources said.
Bangladesh Bank is relying on internal RCBC documents to buttress its assertion that the Filipino bank’s Jupiter Street branch in Manila ignored suspicions raised by some RCBC officials when the money was first remitted to the accounts on February 5, and then delayed acting on requests from RCBC’s head office to freeze the funds on February 9, said one of the sources in Dhaka.
RCBC did not respond to requests for comment, but its then president Lorenzo Tan told a Senate hearing in March that the incident was “some judgment error from the
people on the ground”.
“I think what happened here is we had the IT controls, the human controls. But unfortunately, it failed in the end, in the execution,” said Tan, who subsequently resigned. “Yes, we are sorry this happened, but you know, it is human error, human judgment or intentional.”
The Bangladeshi delegation consists of Debaprosad Debnath and Abdul Rab from BB’s financial intelligence unit, BB lawyer Ajmalul Hossain, and Bangladesh’s ambassador to the Philippines, John Gomes. They plan to meet with officials from the anti-money laundering council in Manila, the Philippines’ department of justice, the central bank of the Philippines and from RCBC over the next four days, said the sources.
BB spokesman Subhankar Saha declined to say if the bank had plans to sue RCBC, but added it was trying to recover the money with the help of the Philippines’ central bank.
RCBC has previously blamed its own employees for the ease with which the money left the bank, including the manager of the branch in question. But the Dhaka source said the Bangladesh Bank believes the failures extend beyond individual officers and that RCBC allowed itself to be used as a conduit for the illegal transfer of stolen money.
Bangladesh Bank claims the documents show that RCBC should be accountable for the losses. The documents, which have been reviewed by Reuters, include emails between RCBC managers at the time of the heist in February as well as memos and emails to various RCBC officials during a subsequent internal investigation.
Some officials at RCBC’s headquarters, also in Manila, had questioned the transfers after about $22.7mn of the money was withdrawn from one of the accounts in cash at 3.16pm that day only to be then deposited to another account that was opened at around 3pm that day at the same branch, according to the notice sent to Reyes.
The documents show that when the bank reopened on February 9 after the Chinese New Year holiday, RCBC’s settlements department received messages as early as 9.15am from Bangladesh Bank, alerting it about the fraud. It sent four emails, between 10.59am and 11.30am, to its Jupiter Street branch, asking it to recall or freeze the remaining funds, the documents show. The reasons for the delay in sending those emails could not be
ascertained.
The branch processed withdrawals, totalling $58.15mn, between 10.24 am and 11.35 am, the documents show. According to former Senator Sergio Osmena, who led a Philippines’ Senate probe into the events, only $15.2mn of this was withdrawn
before 11.19am.
“RCBC did not perform its role properly,” Bangladesh Bank’s Saha said. “RCBC is similarly liable as those parties who took money in their accounts.”
BANGLA
